| Item 1.01 | Entry into a Material Definitive Agreement. |
Fifth Amendment to Credit Agreement and Investor Documents
On February 19, 2021, Recro Pharma, Inc. (the “Company”) entered into a Fifth Amendment to Credit Agreement and Investment Documents by and among the Company, the Company’s subsidiaries named as guarantors therein (the “Guarantors”), the lenders named therein (the “Lenders”), and Athyrium Opportunities III Acquisition LP (“Athyrium Opportunities III”), in its capacity as the administrative agent (the “Fifth Amendment”). The Fifth Amendment provides for the repayment by the Company of $16.0 million of the outstanding principal amount of the loans issued under the Credit Agreement dated as of November 17, 2017, by and among the Company, the Guarantors and Athyrium Opportunities III as administrative agent (the “Credit Agreement”), reduces the interest rate on the remaining loans outstanding and permits an equity issuance in connection with the Fifth Amendment and the transactions contemplated thereby. The Fifth Amendment also changes certain other terms and covenants contained the Credit Agreement that allow the Company to pursue additional acquisitions as well as easing certain requirements surrounding the financial covenants, including the liquidity the Company is required to maintain as well as the threshold for compliance with the consolidated leverage ratio.
Private Placement and Stock Issuance Agreement
On February 19, 2021, the Company entered into a Stock Issuance Agreement (the “Stock Issuance Agreement”) with Athyrium Opportunities III and Athyrium Opportunities II Acquisition LP (“Athyrium Opportunities II” and, together with Athyrium Opportunities III, “Athyrium”) for the sale by the Company in a private placement (the “Private Placement”) of 2,202,420 shares (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”) as consideration for Athyrium’s entrance into the Fifth Amendment and reduction in the amount of principal and interest outstanding under the Credit Agreement and payments of accrued and unpaid interest and an exit fee in an aggregate amount equal to $9,360,285.
The Private Placement is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. Each of Athyrium Opportunities III and Athyrium Opportunities II represented that it is an accredited investor within the meaning of Rule 501 of Regulation D, and is acquiring the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The Shares were offered without any general solicitation by the Company or its representatives.
The Shares sold and issued in the Private Placement are not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the “SEC”) or an applicable exemption from the registration requirements. Pursuant to the Stock Issuance Agreement, the Company has agreed to registered the resale of the Shares by March 20, 2021.
| Item 3.02 | Unregistered Sales of Equity Securities |
The information in Item 1.01 above is incorporated in this Item 3.02 by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are filed herewith:
